Bristol-Myers Squibb: Shifting Gears
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Coming off the exclusivity losses of Plavix and Avapro during 2012, Bristol-Myers Squibb was a company looking for a new path to success. Recent developments suggest, however, that the company’s leaders are not nibbling around the edges of that new path; they have a clear vision of where it lies. Their statement of intent has appeared publicly in the form of two major strategic decisions – the first, a divestment of the company’s diabetes portfolio, becoming public in late 2013. The second is a growing focus on immuno-oncologics and other specialty medicines, coming into focus in the first half of 2014.
“Since 2007, we have executed against a BioPharma strategy that has effectively turned Bristol-Myers Squibb into an industry leader,” says CEO LambertoAndreotti. “We have focused our resources on innovative pharmaceuticals. We have strengthened our pipeline and portfolio and diversified our geographical emphasis. And we have constantly evolved our organization to meet the challenges and opportunities of an ever-changing external environment. It was in that spirit that we announced in December our decision to sell the diabetes business of Bristol-Myers Squibb which comprised our global alliance with AstraZeneca – an important decision that was taken after a thorough assessment of the benefits it will generate for our company. It was also in that spirit that we sharpened our company’s R&D strategic focus to a more specialty care model.”
Bristol-Myers Squibb’s revenue dropped by 7 percent in 2013 to $16.39 billion. The company’s bottom line, though, rose by 3.2 percent to $2.58 billion, and earnings per share were up 38 cents to $1.54, while spending on research and development fell by 4.4 percent to $3.73 billion. In the first half of 2014, revenue dropped by another 2.3 percent to $7.7 billion, while net income was up 10.1 percent to $1.27 billion and EPS increased seven cents to $0.76. Company leaders are projecting full-year EPS for 2014 at between $1.50 and $1.60.
Acquisitions And Partnerships
In December 2013, BMS announced that it had signed an agreement to sell its global diabetes business that was part of its collaboration with AstraZeneca. Under terms of the agreement, AstraZeneca made an upfront payment of $2.7 billion to Bristol-Myers Squibb, with potential regulatory and sales-based milestone payments of up to $1.4 billion and will make royalty payments based on net sales through 2025. In addition, AstraZeneca will make payments of up to $225 million if and when certain assets are subsequently transferred. The deal duly closed in February 2014.
“This agreement will allow us to further evolve our business model as a leading specialty BioPharmacompany and increase resources behind the opportunities that drive the greatest long-term value for patients, our company, and our shareholders,” Mr. Andreotti said on announcement of the deal. “Today’s announcement puts the diabetes franchise in the capable hands of AstraZeneca and allows us to move to a more simplified operating model consistent with our pipeline and portfolio.”
Bristol-Myers Squibb and AstraZeneca entered into an alliance agreement in January 2007 to enable the companies to jointly research, develop, and commercialize select investigational drugs for type 2 diabetes. The alliance has since been expanded to collaborate on additional diabetes products. Bristol-Myers Squibb has sold its global diabetes business that was part of this collaboration, which includes Onglyza, KombiglyzeXR/Komboglyze, dapagliflozin, Byetta, Bydureon, Symlin, and metreleptin. The agreement also includes the sale of the former Amylin manufacturing facility in West Chester, Ohio, and covers the future purchase by AstraZeneca of Bristol-Myers Squibb’s Mt. Vernon, Ind., manufacturing facility approximately 18 months following the closing of the transaction.
In March 2014, BMS and Five Prime Therapeutics Inc. signed a collaboration agreement for the discovery, development, and commercialization of immuno-oncology therapies directed toward targets identified in two undisclosed immune checkpoint pathways using Five Prime’s proprietary target discovery platform. According to company leaders, Bristol-Myers Squibb will take advantage of Five Prime’s platform to advance its existing immuno-oncology programs by identifying the most viable drug targets for continued research and development. Drug candidates developed against these new and existing targets may be studied either as single agents or in combination with existing or potential Bristol-Myers Squibb immuno-oncology therapies.
Under the terms of the agreement, Bristol-Myers Squibb will obtain exclusive worldwide rights to develop and commercialize products directed toward certain protein targets identified by Five Prime prior to and during the collaboration. Bristol-Myers Squibb has made an upfront payment of $20 million to Five Prime and will provide up to $9.5 million in research funding over the course of the research term. Additionally, Bristol-Myers Squibb will make a payment of about $21 million to acquire 4.9 percent of Five Prime’s outstanding common stock purchased at about a 30 percent premium. Five Prime will be eligible to receive up to $300 million in future development, regulatory and sales based milestone payments per collaboration target and tiered mid-single-digit rising to low-double-digit royalty payments on net sales of each product commercialized by Bristol-Myers Squibb.
In April, BMS announced the acquisition of iPierian, a privately held biotechnology company focused on the discovery and development of new treatments for Tauopathies, a class of neurodegenerative diseases associated with the pathological aggregation of Tau protein in the human brain. The acquisition gives Bristol-Myers Squibb full rights to iPierian’s lead asset IPN007, an innovative preclinical monoclonal antibody that represents a promising new approach to treat progressive supranuclear palsy and other Tauopathies, and has the potential to commence Phase 1 clinical trials by early 2015. Under the terms of the agreement, Bristol-Myers Squibb has acquired all of iPierian’s issued and outstanding shares of capital stock and all common stock equivalents in an all cash transaction for a purchase price of $175 million, with the potential for additional development and regulatory milestone payments totaling $550 million, along with future royalties on net sales.
“As part of our evolution to a diversified specialty BioPharma company, we have identified genetically defined diseases as an area where the company has an opportunity to significantly advance the standard of care for patients with limited treatment options,” says Francis Cuss, MB BChir, executive VP and chief scientific officer, Bristol-Myers Squibb. “The acquisition of iPierian supports our growing efforts in this area and builds on Bristol-Myers Squibb’s internal expertise and alliances focused on the Tau pathway and neurodegenerative diseases.”
In May, BMS and Celldex Therapeutics Inc. entered into a clinical trial collaboration to evaluate the safety, tolerability, and preliminary efficacy of Opdivo, Bristol-Myers Squibb’s investigational PD-1 immune checkpoint inhibitor, and varlilumab, Celldex’s CD27 targeting investigational antibody in a Phase I/II study. Multiple tumor types will be explored in the study, which could potentially include non-small cell lung cancer, metastatic melanoma, ovarian, colorectal, and squamous cell head and neck cancers.
Opdivo and varlilumab are part of a new class of cancer treatments known as immunotherapies that are designed to harness the body’s own immune system to fight cancer through separate yet complementary mechanisms of action that result in T-cell mediated destruction of cancer cells. Preclinical data suggest the combination of these two mechanisms may enhance anti-tumor immune response compared to either agent alone.
Under the terms of the agreement, Bristol-Myers Squibb was responsible for a one-time payment of $5 million to Celldex and the parties will share development costs. Celldex is responsible for conducting the Phase I/II study, which is expected to begin in the fourth quarter of 2014. Additionally, the parties have re-structured an existing agreement between Celldex and Medarex related to Celldex’s CD27 program, and waived certain future milestone payments and reduced future royalty rates that would have been due from Celldex to Medarex. Medarex was acquired by Bristol-Myers Squibb in September of 2009. The companies are working exclusively with each other to explore anti-PD-1 antagonist antibody and anti-CD27 agonist antibody combination regimens. Bristol-Myers Squibb has a time-limited right of first negotiation if Celldex wishes to out-license varlilumab.
Also in May, BMS and Incyte Corp. established a clinical trial collaboration to evaluate the safety, tolerability, and preliminary efficacy of a combination regimen of Opdivo and Incyte’s oral indoleamine dioxygenase-1 (IDO1) inhibitor, INCB24360, in a Phase I/II study. Multiple tumor types will be explored in the study, which could potentially include melanoma, non-small cell lung, ovarian, colorectal, squamous cell carcinoma of the head and neck, and diffuse large B-cell lymphoma.
Continuing the immuno-oncology trend, also in May BMS and CytomX Therapeutics Inc. signed a worldwide research collaboration and license deal to discover, develop, and commercialize novel therapies against multiple immuno-oncology targets using CytomX’s proprietary Probody Platform. Probodies are monoclonal antibodies that are selectively activated within the cancer microenvironment, focusing the activity of therapeutic antibodies to tumors and sparing healthy tissue. The unique selectivity of Probodies expands the therapeutic window for validated and novel targets, and has the potential to create multiple new classes of safer and more effective therapies.
“Immuno-oncology offers a tremendous opportunity to change how cancer is treated, and Bristol-Myers Squibb is committed to advancing our immuno-oncology drug research and development for patients living with the disease,” Dr. Cuss says. “The Probody Platform has the potential to broaden discovery of innovative therapies, and the collaboration with CytomX reflects our continued leadership in immuno-oncology.”
Under the terms of the agreement, CytomX will grant Bristol-Myers Squibb exclusive worldwide rights to develop and commercialize Probodies for up to four oncology targets including CTLA-4, a clinically validated immune inhibitory checkpoint receptor. Bristol-Myers Squibb will have certain additional rights to substitute up to two collaboration targets. Bristol-Myers Squibb will make an upfront payment of $50 million to CytomX and provide research funding over the course of the research term. CytomX will also be eligible to receive additional preclinical payments and up to $298 million in future development, regulatory and sales milestone payments for each collaboration target, as well as tiered mid-single-digit rising to low-double digit royalty payments on net sales of each product commercialized by Bristol-Myers Squibb.
In June, BMS and Syngene International, India’s largest contract research organization, announced a five-year extension of their drug discovery and development collaboration in India. Since 2007, Bristol-Myers Squibb has been working with Syngene and its corporate parent, Biocon Ltd., to develop integrated capabilities in medicinal and process chemistry, biology, biotechnology, biomarkers, drug metabolism and pharmacokinetics, analytical research, and pharmaceutical development at the Biocon Bristol-Myers Squibb Research Center in Bangalore. The U.S.-India collaboration has produced six drug candidates for further study and also helped Bristol-Myers Squibb reduce the time and costs associated with advancing new compounds to first-in-human studies. One drug candidate currently in clinical trials was discovered at BBRC and early nonclinical development work done at BBRC has enabled most of Bristol-Myers Squibb’s small molecule assets to advance to later stages of development over the last five years.
“I am excited about the opportunity to continue our highly productive collaboration with Biocon and Syngene,” Dr. Cuss says. “The BBRC has supported the nonclinical development of a large proportion of our small-molecule portfolio assets since its inception, and is a premier example of the high-quality innovative drug hunting that is taking place in India today.”
In July, BMS and Ono Pharmaceutical Co. signed a strategic collaboration agreement to jointly develop and commercialize multiple immunotherapies as single agents and combination regimens to help address the unmet medical needs of patients with cancer in Japan, South Korea and Taiwan. As part of the agreement, Bristol-Myers Squibb and Ono will jointly develop and commercialize Opdivo and Yervoy across a broad range of tumor types.
Under the terms of the agreement, Bristol-Myers Squibb and Ono will jointly develop and commercialize all collaboration products in Japan, South Korea, and Taiwan. Development costs and commercial profits will be shared equally when Opdivo is used in combination with any Bristol-Myers Squibb compound (Yervoy, lirilumab, urelumab, BMS-986016). For a Bristol-Myers Squibb compound used as monotherapy, or two Bristol-Myers Squibb compounds used in a combination regimen, Bristol-Myers Squibb will fund the substantial majority of development costs and receive the substantial majority of commercial profits. When Opdivo is used as a single agent, Ono will fund the substantial majority of development costs and receive the substantial majority of commercial profits.
“Bristol-Myers Squibb’s collaboration with Ono supports our goal to maximize the full potential of our immuno-oncology portfolio for patients worldwide,” Mr. Andreotti says. “This collaboration combines our leadership in immuno-oncology with both companies’ experience and capabilities in Asia, and strengthens our long-standing relationship with Ono.”
In August, Allied Minds and BMS announced the formation of Allied-Bristol Life Sciences LLC, a new jointly owned enterprise created to identify and foster research and pre-clinical development of biopharmaceutical innovations from leading university research institutions across the United States. Allied-Bristol Life Sciences will focus on efficiently and effectively converting discoveries from university research institutions into therapeutic candidates for clinical development, and ultimately approved therapies that address serious diseases. For programs identified by the new enterprise, university researchers will be able to access Bristol-Myers Squibb’s drug discovery research expertise, and Allied Minds’ financial and management experience.
“Allied-Bristol Life Sciences LLC brings together cutting-edge ideas, BioPharma experience and drug discovery expertise focused on maximizing the potential of new scientific approaches to addressing serious disease,” says Carl Decicco, senior VP and Head of Discovery, Bristol-Myers Squibb. “We believe this new venture will enhance the translation of early-stage academic research and will ultimately help advance important potential new medicines more efficiently.”
Under the terms of the agreement, the companies have jointly formed and funded Allied-Bristol Life Sciences, which will work with university researchers to identify discoveries it believes has promising therapeutic and commercial potential, and will support the research and development needed to take these early-stage opportunities from initial feasibility to pre-clinical candidacy. Allied Minds and Bristol-Myers Squibb together will form and fund new companies to conduct feasibility and full-phase discovery programs. Once a program succeeds in identifying a pre-clinical candidate, Bristol-Myers Squibb will have the option to acquire the company from Allied-Bristol Life Sciences under pre-agreed terms.
Also in August, BMS and Celgene Corp. established a clinical trial collaboration to evaluate the safety, tolerability, and preliminary efficacy of a combination regimen of Opdivo and Celgene’s nab technology-based chemotherapy Abraxane, in a Phase I study. Multiple tumor types will be explored in the study including HER-2 negative metastatic breast cancer, pancreatic cancer, and non-small cell lung cancer.
“Bristol-Myers Squibb continues to forge partnerships focused on exploring the effects of combination regimens that utilize promising therapies from our immuno-oncology portfolio,” says Michael Giordano, senior VP, Oncology Development, Bristol-Myers Squibb. “Through this collaboration, Bristol-Myers Squibb and Celgene will work together to advance the science and understanding of how the body’s own immune system and chemotherapy might work together to fight cancer.”
Abilify, indicated for schizophrenia, bipolar mania, and major depressive disorder, remained Bristol-Myers Squibb’s leading product by sales in 2013. The company’s revenue from Abilify suffered, though, due to a previously agreed-upon change in its share of the drug’s sales with partner marketer Otsuka, from 51.5 percent in 2012 to 34 percent in 2013. Due mostly to the effects of this change, BMS’ Abilify revenue dropped by 19 percent to $2.29 billion. In the first half of 2014, Abilify sales for BMS rose 0.9 percent to $1.1 billion.
The HIV drug Sustiva celebrated the 15th anniversary of its approval in 2013 with sales growth of 5.7 percent to $1.61 billion. The drug’s exclusivity is scheduled to expire in March 2015. In the first half of 2014, Sustiva sales dropped 14.8 percent to $680 million.
Also indicated for the treatment of HIV, Reyataz sales edged up by 2 percent in 2013 to $1.55 billion. Sales of Reyataz dropped 10.9 percent in the first half of 2014, to $706 million.
The third of Bristol-Myers Squibb’s big three virology product, the hepatitis B drug Baraclude, has shown the most impressive growth performance among the three of late. The product grew its sales by 10 percent to $1.53 billion in 2013, remaining the global market leader in oral treatments for hep B. In the first half of 2014, Baraclude sales were up another 5.2 percent to $775 million. Baraclude’s exclusivity was originally scheduled to end in 2015, though Bristol-Myers Squibb is appealing a U.S. district court finding that invalidated Baraclude’s patent in February 2013.
The autoimmune drug Orencia, approved for the treatment of rheumatoid arthritis, enjoyed a strong year in 2013, with sales growth of 22.8 percent to $1.44 billion. In June, the first release of new data from a Phase IIIb RA trial showed that Orencia in combination with methotrexate achieved significantly higher rates of DAS-defined remission at 12 months than treatment with standard of care agent methotrexate (60.9 percent versus 45.2 percent, respectively), in biologic and methotrexate-naïve patients with early active RA. Orencia is also being studied in Phase III trials for potential use in lupus nephritis and psoriatic arthritis. In the first half of 2014, Orencia sales were up another 13.8 percent to $765 million.
The leukemia drug Sprycel enjoyed sales of $1.28 billion in 2013, an impressive improvement of 25.6 percent. In December, BMS and partner developer Otsuka announced four-year follow-up data from the Phase III DASISION study of Sprycel 100 milligrams once daily versus Gleevec 400 milligrams daily in the first-line treatment of adults with Philadelphia chromosome-positive chronic phase chronic myeloid leukemia. At four years, 76 percent of Sprycel patients versus 63 percent of Gleevec patients achieved a major molecular response. Additionally, 84 percent of Sprycel patients versus 64 percent ofGleevec patients achieved BCR-ABL ≤10 percent at three months, which is considered an optimal molecular response as defined by treatment guidelines. In the first half of 2014, Sprycel sales jumped another 18.5 percent to $710 million.
Yervoy, BMS’ first marketed immuno-oncology therapy, has been showing even more impressive sales growth than Sprycel. In 2013 the melanoma drug’s sales increased by 36 percent to $960 million, and blockbuster status should be easily achieved in 2014, with sales for the first half up another 28.1 percent to $592 million. In June, results from a Phase III randomized, double blind study showed that Yervoy significantly improved recurrence-free survival versus placebo for patients with stage 3 melanoma who are at high risk of recurrence following complete surgical resection, an adjuvant setting.
In The Pipeline
Though on its way to a billion dollars in sales with only a melanoma indication, Yervoy is also being studied in several other cancers. In September 2013, results were released from the Phase III randomized, double-blind clinical trial comparing Yervoy to placebo following radiation in patients with advanced metastatic castration-resistant prostate cancer who have received prior treatment with docetaxel. The study’s primary endpoint of overall survival did not reach statistical significance. However, anti-tumor activity was observed across some efficacy endpoints, including progression free-survival. Yervoy is also in late stage development for first-line squamous non-small cell and small cell lung cancer, and Phase II development for gastric and ovarian cancer.
The cardiovascular drug Eliquis, being developed jointly by BMS and Pfizer, has added a number of indications of late. In March, the compound was approved by FDA for the prophylaxis of deep vein thrombosis, which may lead to pulmonary embolism, in patients who have undergone hip or knee replacement surgery. Then, in August, FDA approved the drug for the treatment of DVT and PE, and for the reduction in the risk of recurrent DVT and PE following initial therapy. The European Commission had approved Eliquis for the DVT/PE indication the previous month.
Eliquis is still being studied further in nonvalvular atrial fibrillation, its first indication. In September 2013, a subanalysis from the Phase III ARISTOTLE trial demonstrated that Eliquis compared with warfarin reduced stroke or systemic embolism, caused fewer major bleeding events, and reduced all cause mortality in NVAF patients with or without valvular heart disease. And in July, the developers announced that the first patient has been enrolled into a Phase IV clinical trial called EMANATE assessing the effectiveness and safety of Eliquis in patients with NVAF undergoing cardioversion.
In October 2013 BMS and Alder Biopharmaceuticals announced the presentation of efficacy and safety data from a Phase IIb dose-ranging study of subcutaneous clazakizumab in adults with moderate-to-severe rheumatoid arthritis and an inadequate response to methotrexate. Clazakizumab is a humanized anti-IL-6 monoclonal antibody that is directed against the IL-6 cytokine rather than its receptor. In the Phase IIb study clazakizumab doses ranging from 25-200 mg monotherapy and in combination with methotrexate were studied versus methotrexate alone. Adalimumab in combination with methotrexate was included as an active reference arm. All clazakizumab treatment arms, alone or in combination with methotrexate, demonstrated efficacy in controlling the signs and symptoms of RA, and met the predefined primary endpoint of a higher ACR20 response rate versus methotrexate alone after 12 weeks of treatment. All clazakizumab treatment groups were also associated with improved ACR 20/50/70 response rates and HAQ-DI scores versus methotrexate at week 24. Rates of low disease activity and remission with clazakizumab plus methotrexate, as measured by DAS28 CRP, CDAI, and SDAI criteria were numerically greater for clazakizumab at 12 and 24 weeks than the active comparator.
“Bristol-Myers Squibb has a long-standing commitment to immunoscience research and the development of innovative medicines for patients living with chronic immune-mediated diseases, such as RA,” says Brian Daniels, MD, senior VP, Global Development and Medical Affairs, Research and Development, Bristol-Myers Squibb. “Despite the recent advances in the treatment of RA, more efficacious therapies are needed. The results of this study support the potential for clazakizumab to fulfill the need for new medicines that can help patients with RA achieve disease control and remission.”
In April, BMS announced Phase III results from the global HALLMARK-Dual study investigating the alloral, interferon- and ribavirin-free regimen of daclatasvir, a NS5A inhibitor, and asunaprevir, a NS3 inhibitor, among genotype 1b hepatitis C virus (HCV) infected patients. Results showed that the 24-week regimen achieved an overall sustained virologic response (a functional cure) 12 weeks after the end of treatment (SVR12) among treatment-naïve (90 percent), peginterferon/ribavirin nonresponder (82 percent), and peginterferon/ribavirin ineligible/intolerant (82 percent) patients, including cirrhotic and non-cirrhotic patients (84 percent and 85 percent). Armed with these positive results, BMS filed a new drug application with FDA for daclatasvir and asunaprevir that same month; the dual regimen had already been granted Breakthrough Therapy Designation in February. Japanese regulatory authorities approved daclatasvir and asunaprevir under the trade names Daklinza and Sunvepra in July; at the same time Daklinza earned a positive opinion from the EMA’s Committee for Medicinal Products for Human Use.
“These FDA submissions represent a major step towards offering daclatasvir-based regimens to U.S. HCV patients, many of whom continue to have high unmet medical needs,” Dr. Daniels says. “We are excited to have achieved this milestone and, looking forward, will continue to innovate and invest in daclatasvir in a range of patient types and regimens.”
In May, BMS and partner developer AbbVie announced that FDA had granted elotuzumab, an investigational humanized monoclonal antibody, Breakthrough Therapy Designation for use in combination with lenalidomide and dexamethasone for the treatment of multiple myeloma in patients who have received one or more prior therapies. The designation is based on findings from a randomized Phase II, open-label study that evaluated two dose levels of elotuzumab in combination with lenalidomide and low-dose dexamethasone in previously treated patients, including the 10 mg/kg dose that is being studied in Phase III trials.
“Despite recent advances in the treatment of relapsed or refractory multiple myeloma, it remains an area of unmet need,” says Michael Giordano, senior VP, Head of Development, Oncology & Immunosciences, Bristol-Myers Squibb. “This Breakthrough Therapy Designation underscores the potential of elotuzumab in this setting and reinforces Bristol-Myers Squibb’s longstanding commitment to the research and development of novel medicines to treat hematologic malignancies.”